OCTOBER 28, 2008

Quitting time?

The threat by Ferrari to pull out of Formula 1 if the FIA President Max Mosley goes on with his plans to introduce standard engines is not unexpected. This, of course, provides the media with a good story for the next 24 hours, but what does it really mean? Taken at face value the standardisation of engines is something that could drive out not just Ferrari and Toyota but also other manufacturers. Honda would almost certainly follow and there are fears that BMW management would walk as well (some say that the Germans are already the closest to the edge of all the car companies in F1). And if BMW goes one has to wonder about Mercedes-Benz.

The teams might be sold on to others (if there is anyone out there to buy them) but will Agag Grand Prix and Todt Racing really have the same brand value as Ferrari and Mercedes-Benz?

Clearly not. A glorified version of GP2 will not get fans climbing trees at the Autodromo Nazionale at Monza. Added to that the defection of the big manufacturers is unlikely to see them leave the sport entirely so pushing them out of F1 would be creating more opposition for Grand Prix racing. And that is not a smart idea.

Let us not forget that there was a time in the 1960s when sports car racing was bigger than F1 - and there really is no reason why that should not happen again if F1 self-destructs.

There is, therefore, no sensible logic to be going down this path. Having three, four or five-race engines and freezing development so that the units are evenly matched is sensible. Millions have been saved and there has been little real effect on the sport. This also means that the small teams can get cheap engines to help them survive.

There are now other areas which can be given the same basic treatment. The problem is that the FIA wants to cut costs and yet at the same time beat on the environmental drum, which means that it needs to allow research and development of new technologies. This means it is in an impossible situation. Standardising KERS is a sensible move in that teams have already shown that it is not going to make much difference in terms of the relative performance (because the idea was not properly thought through). A climbdown over KERS would however open the FIA to claims that its environmental ideas have cost the teams tens of millions are dollars, which does not look good when the FIA is dressed up in its cost-cutting guise. This may have bought a perception that F1 is reacting to environmental questions, which is a good thing, but it has achieved little else apart from wasting money.

The FIA has the means to back down. Hidden away in the tender documents is the statement "the FIA can take any decision from the tender that it deems to be in the interest of the sport", which is, of course, a get-out clause. There is obviously some potential for a standard transmission but this is not going to save that much money as the teams have all now gone through the process (and expense) of creating quick-shift gearboxes and appear to have gone as far as is possible down that route. Standardising the transmissions will thus only stop further research and development.

A number of teams are also up in arms about the FIA's apparent desire to have standard fuels. This makes no sense at all and thus cannot be taken at face value. The fuel used in F1 is subject to "fingerprinting" which means that there cannot be any significant development that changes the character of the fuel. What standard fuel would do would be to drive out the oil companies, which are the traditional and logical partners of the car manufacturers in the sport. Shell, Mobil, Elf, Petronas and Petrobras provide very considerable amounts of funding for the big teams (estimated to be in the region of $150m) and to remove their ability to use the sport as a true marketing tool would be damaging to the teams. It would cut back on the money supply (and thus force more cost-cutting) but it is hard to see how this is a good thing for the sport. Oil companies have been with the sport through thick and thin and are likely to be around when banks and telecommunications companies have wandered off to do other things and they are among the richest companies in the world and can afford F1 without too much trouble.

The bottom line in all of this that F1 teams will spend whatever they have in order to gain an advantage and if the FIA cannot get them to agree to a budget cap it is best to let them sort it out amongst themselves, while at the same time, making sure that there are sufficient small teams left to fill the grids. It is best to have them agree contracts that they will stay in the sport for a contracted period and if they choose to leave will agree to fund replacement teams. If they want the benefits of F1 they also need to accept some responsibilities. They also need to be better rewarded by the sport which pays out only half of what it earns, the rest going to banks which have loaned money to fill the pockets of the financiers who care nothing for the sport. Once the current debt is paid, the commercial rights need to be discussed again. A good promoter has great value but finding the right balance is also important and there are big areas which have not been exploited and promotion that has not been done.

It is all a great balancing act.

When all is said and done, what is important is that the sport remains as healthy as possible - and is seen to be as healthy as possible.

The birth of the Formula One Teams Association is a sign that the teams want to have more of a say in the future. This is only right and fair as they are the people who are really investing in the sport. The federation believes that it has the right to dictate the way in which the sport develops and so it is pushing back against FOTA and one could argue that some of the proposals have been designed to try to divide the teams. They are not falling for that one this time having finally grasped the fact that for the last 20 years they have been divided and conquered.

Keeping Ferrari sweet has always been a key element in the FIA policy as everyone knows that Ferrari is the key to F1. He who is allied to Ferrari is allied to what F1 stands for.

Ferrari has now seen the value of working with the other teams and it seems that their unity is driving the FIA to more extreme positions. Cost-cutting is a worthy cause but the idea of standarised engines is simply ridiculous. Max Mosley is an intelligent man and must know this.

FOTA has made a clear effort (up to now) to keep all the dirty laundry out of the newspapers but the FIA has made much use of the public route. The question is really whether F1 will be better off with this kind of publicity or would it have been better to have done all the talking quietly behind closed doors. In the recent months Mosley has himself proved that not all publicity is good publicity and it would be nice if the sport could forget the whole sordid spanking story, just as it would be nice if the Tony Blair sleaze stories would go away.

The cleaner the sport can be, the more big companies will consider becoming involved.

For the FIA to remain relevant it would surely be best for the federation to have a different style. Trying to encourage consensus rather than seeking to divide is a better way to go forward. The FIA should not be seen as the enemy but rather as a helpful "marriage guidance counsellor" for the teams.

There is still a role for the FIA as the policeman of the sport but work needs to be done to improve the image of the race management in F1.